Blown turbo - engine damage? and insurance conundrum

[spats]

Insurance companies are unreal.

Yet again being honest has allowed them to get out of paying. The condition of the engine has no bearing on a claim for damage from no fault accidents.

And they wonder why some people hold back from telling the companies things. I bet it you had just took the 7k payout and kept the car they would be none the wiser. They have just used that to get out paying.

Utter scum. I hope the Ombudsman kicks their backsides into touch.

[ftypical]

Hmm. I think you'll lose. And - based on the information provided - you may find yourself having some difficulty getting insurance in future.

Sorry, but as described it looks like attempted fraud.

[marshalla]

spats said:

Insurance companies are unreal.

Yet again being honest has allowed them to get out of paying. The condition of the engine has no bearing on a claim for damage from no fault accidents.

Correct - unless it was going to require a decision about writing it off. A car with a blown turbo/engine is worth less than one which works.

spats said:

And they wonder why some people hold back from telling the companies things. I bet it you had just took the 7k payout and kept the car they would be none the wiser. They have just used that to get out paying.

Utter scum. I hope the Ombudsman kicks their backsides into touch.

Nope - they paid less because the OP got the job done for less. They were willing to pay a market rate for their repairer to fix the bodywork. The OP decided to go ahead and get a cheap repair done before any financial settlement had been agreed and handed over. As a result, the insurer is willing to pay what the repairs actually cost and not offer any form of betterment.

OP should have got the cheque in his hand before authorising any work.

[dogzilla]

ftypical said:

Hmm. I think you'll lose. And - based on the information provided - you may find yourself having some difficulty getting insurance in future.
Sorry, but as described it looks like attempted fraud.

I can only assume you didn't actually bother to read anything I wrote then.

marshalla said:

The OP decided to go ahead and get a cheap repair done before any financial settlement had been agreed and handed over.
OP should have got the cheque in his hand before authorising any work.

You mean being told 3 times that a cash in lieu payment was agreed and then authorising repairs to my car? Yeah my fault for not waiting to get the cheque obviously but that's besides the point.

Fortunately I live with two practising solicitors and they've been doing some research so I think I'm on solid ground when it comes to the law here.

The loss of value to my car occured at the point of impact when the 3rd party crashed into me so I am entitled to claim the full amount from the 3rd party. That amount is how much it would take to return the car back to it's original condition, which in this case is the signed and agreed BMW repair quote.

The fact that I spent less on the repair is irrelevent. That is entirely my choice to do so because ultimately I have still suffered X loss which must be compensated by the 3rd party.

This fact has already been well established in law including a supreme court case recently involving insurance companies where the Lord Justice took the chance to clarify further.

Coles V Hetherton said:

As Cooke J pointed out at [7] of his judgment (2), the correct jurisprudential analysis of a claim for diminution in value, even if it is measured by the reasonable cost of repairs, is that it is a claim for general damages, not one for "special damages". The diminution in value claim should therefore be pleaded as a claim for general damages. Documents such as an invoice for the cost of the repairs undertaken are no more than evidence of the diminution in value suffered by the chattel as a result of the negligence of the wrongdoer which can be used to make good the claim. Strictly speaking, the cost of the repairs is not itself the loss suffered. In addition to the direct loss represented by diminution in value, there may be other, consequential losses, such as deprivation or "loss of use" of the vehicle, but that constitutes a different head of claim.[27] Once again a claim for simple deprivation, or loss of use, is a claim for general damages. However, if the chattel concerned is one that is normally used in the hope of making a profit

Coles V Hetheron said:

Taking Lord Hobhouse's statement together with statements in other cases: (1) where a chattel is damaged by the negligence of another that loss (the "direct" loss) is suffered as soon as the chattel is damaged. (2) The proper measure of that loss is the diminution in value that the chattel has suffered as a result of the negligence of the defendant. This follows the general principle in awarding damages, ie. that of restitution.[21] In Lord Hobhouse's phrase, "this can be expressed as a capital account loss". (3) If the chattel can be economically repaired, the claimant is entitled to have it repaired at the cost of the wrongdoer, although the claimant is not obliged to repair the chattel to recover the direct loss suffered

[iSore]

There's an old saying: 'It's not sold until you have the money" and the same applies here.

You were too quick, and you've shafted yourself. A nice cheque for 7-8 grand and a shagged 2008 120d that's still worth 3-4 grand to some dreamer. Could have been a nice result.

[dogzilla]

There is an old saying, if you've got nothing useful to say, shut you gob you dafty.

I think that applies here.

[dogzilla]

Ok so had a dead end with my original complaint advisor so I escalated it.

Spoke with manager and he apologised profusely as I have been consistently been given wrong information, conceded that she was very dissapointed as it should not have gone this far.

1. Engineer is concerned that due to the side swipe that it may have impacted the wheel and cause suspension damage. No damage to the wheel occured and the car is fine suspension wise so most likely this can be resolved either internally or by an inspection before they hand over cash.

2. Because there are two claims, with two individual authorised quotes, there is some confusion over the exact worth of the damage when put together. In theory, where there is overlap, there are some costs savings, eg. the car needing to be resprayed/blended etc...

So they are trying to pick between the two quotes and come up with a cost assuming the two repairs are done simultaneously.

So I wait now on point 1+2, if they can be both resolved then I was given the impression cash in lieu would be authorised.

[ftypical]

Out of curiosity, why did you post if you're not interested in any responses that don't reinforce your view of the situation?

Consulting those you live with in the first instance might have been a better bet.

Best wishes in your attempt at Betterment - hopefully it'll pay for the trashed engine.

[hughcam]

After reading the entire thread I have come to the conclusion that you have basically negotiated a bad deal in which you are trying to back out on. You can not agree to a cash in lieu payment AND also get authorisation on repairs. This would mean that you are benefiting from the insurance when car insurance (and most other non life policies) are based on the principle of indemnity (to put you in the same position you were in prior to the loss/body damage). You should have just accepted the cheque and not notified the cost of the body work repair to your insurer.

I understand that the claim handler may have given you bad advice with regards to basis of settlement (I.E cash or repair/reinstatement) however as they have given you £50 compensation that you have also accepted I dont think you have a leg to stand on.

[dogzilla]

ftypical said:

Out of curiosity, why did you post if you're not interested in any responses that don't reinforce your view of the situation?

I'm all for constructive criticism but it rubs me up the wrong way when someone comes into the thread and says nothing useful other than "you've shafted yourself" when I have only acted according to the information I have been given from the insurance company. There was even a reply calling me a insurance scammer which got deleted shortly after posting but not before I read it.

Ultimately I don't have months to sit around without a busted up car waiting for the insurance company to pull their finger out so when I was told 3 times on seperate occasions that a cash in lieu payment was authorised I took the decision to get the work done before the cash hit my account. If that's my only fault then I accept it, however pointing out the obvious is not very constructive is it?

hughcam said:

After reading the entire thread I have come to the conclusion that you have basically negotiated a bad deal in which you are trying to back out on. You can not agree to a cash in lieu payment AND also get authorisation on repairs. This would mean that you are benefiting from the insurance when car insurance (and most other non life policies) are based on the principle of indemnity (to put you in the same position you were in prior to the loss/body damage). You should have just accepted the cheque and not notified the cost of the body work repair to your insurer.

I understand that the claim handler may have given you bad advice with regards to basis of settlement (I.E cash or repair/reinstatement) however as they have given you £50 compensation that you have also accepted I dont think you have a leg to stand on.

The misunderstanding here is that the insurance company told me 3 times they authorised cash in lieu payment and I was led to believe I just had to ring up and they would settle the claim immediately.

Thus, I authorised repair of the car myself to another garage which legally I am entitled to do, however in practise it leaves me out of pocket until the insurance company resolves the claim fully. I accept that.

Also you have to understand these are 3rd party non-fault claims in which my insurance company is essentially acting on my behalf to claim money from the 3rd party who is at fault. Neither the insurance company or myself has an obligation to repair the car as cheap as possible nor do I have any obligation to accept a repair at all, I am perfectly entitled to ask for a cash sum instead.

The 3rd party is liable for an amount which puts me back in the position before the accident, which is how much it would cost to repair it back to it's original condition. I have two authorised quotes from BMW which the insurance company signed off on. It would be difficult to argue otherwise, the pictures, quotes and notes from the engineer are all on file.

The fact that I spent less on the bodywork repair is neither here nor there, that was my choice and it was done at a 3rd party without all the usual BMW warranty or guarantees, there is no doubting it's a lower quality repair, however again, it's my choice to accept a lower quality repair, that doesn't mean the 3rd party owes me less money.

P.S I haven't accepted any money or compensation yet. I'm waiting on a final conclusion.

[iSore]

dogzilla said:

I'm all for constructive criticism but it rubs me up the wrong way when someone comes into the thread and says nothing useful other than "you've shafted yourself"

I hope it all works out for you.

No, really I do.



XXXXXXXX

[Shezbo]

Hi Dog,

The concern here is this:

You completed work to a standard you find acceptable - therefore that is what the insurer will now reasonably pay? Did you really think that you would get your car repaired and have a wad of cash over, by going down this route. Unfortunately insurance does not work like that (I totally get what they promised) as you chose this level of work - I think (from a legal point of view) that is all that they will have pay now?

What a mess...!

[RRLover]

Do you have anything in writing from the insurers ?
On reading the context it does seem a bit of having your cake & eating it

Good luck

[dogzilla]

iSore said:

I hope it all works out for you.
No, really I do.

Sorry for snapping at you but this whole thing is stressing me out and it just felt like being kicked when all I want to do is come out of this with a fair payment for two accidents which were not my fault.

Shezbo said:

Hi Dog,

The concern here is this:

You completed work to a standard you find acceptable - therefore that is what the insurer will now reasonably pay? Did you really think that you would get your car repaired and have a wad of cash over, by going down this route. Unfortunately insurance does not work like that (I totally get what they promised) as you chose this level of work - I think (from a legal point of view) that is all that they will have pay now?

With the greatest respect you are incorrect. Legally speaking how much I specifically pay for a repair is irrelevent to the loss of value sustained to my car and thus how much the 3rd party are liable for.

Lets say I am a body shop guy and I can personally fix my car for £500 in parts. Does that mean the 3rd party is only liable for a £500 repair? No, because it is recognised that the £500 repair is not the true cost of the loss to the car. The amount the 3rd party is liable for is specifically how much it would reasonably cost to repair it back to it's original condition.

Now in my case, I accepted a lower quality of repair, that doesn't mean the 3rd party gets a free ride, that just means I have personally chosen to spend less on the repair and pocket the difference. (in this case for the engine work)

That's not me taking the piss and profiting because I have categorically sustained a loss of value to my car which cannot be disputed. Anyone who thinks otherwise really does not understand that a lower quality repair is not returning the car back to it's original condition. The fact I did has NO bearing on how much the 3rd party is liable for. It is my choice to do with the money as I please, there is nothing in law that says I must spend all of the money on the car or in fact that I must spend any money at all. I am perfectly entitled to take the cash and go to the casino if I want and put up with a banged up car.

This is a legal principle which I have learned goes back into the long and distant history of admiralty law and has been upheld at the supreme court as recently as 2014.

[marshalla]

dogzilla said:

This is a legal principle which I have learned goes back into the long and distant history of admiralty law and has been upheld at the supreme court as recently as 2014.

Can you give us a link the to judgment please ? I'm struggling to find one - but probably using the wrong search terms.

[dogzilla]

marshalla said:

Can you give us a link the to judgment please ? I'm struggling to find one - but probably using the wrong search terms.

There are a number of closely related judements but the most interesting one is : Coles v Hetherton

There are lots of interesting bits in the case which I have quoted below.

Lord Justice said:

"…where a vehicle is negligently damaged and is reasonably repaired, rather than written off, the measure of the claimant's loss can be taken as the reasonable cost of repair. That reasonable cost is not necessarily the repair cost actually incurred, whether by the claimant or its insurer or indeed by anyone else who pays a repairer since the reasonable cost of repair is only a way of ascertaining the diminution in the value of the chattel by reason of the physical damage, though it is the normal and conventional way….A court can assess "the reasonable cost of repair" by reference to any evidence which is sufficient to discharge the burden of proof upon the claimant to establish the amount in question….In each case it will be a matter for the court to determine whether the claimant has made out its case, whether or not repairs have been done and whether or not in invoice is produced for the repair costs".

Lord Justice said:

The argument that the claimants cannot recover the full cost of repair to RSAI because they must mitigate their loss by having the repairs done at a lower cost is wrong because mitigation is not relevant in respect of this "direct" loss. As we have already pointed out, the loss to a claimant whose chattel has been damaged by the negligence of another is immediate. That loss cannot be "mitigated" by having the chattel repaired free or for a lower cost, because it is not the cost of the repairs that constitutes the loss; the loss is the diminution in value of the chattel

Essentially what some in this thread are saying is that because I chose to mitigate the cost of repair that the 3rd party liability is reduced, that is simply not true. Me choosing to mitigate costs does not release the 3rd party from their obligation to meet the full cost of the repair.

It is a simple question of fairness. If you smash my car and it costs £8k to repair but I personally choose to repair it for cheaper, that doesn't let you off the hook because I've already sustained the loss when you hit me.

Edited by dogzilla on Tuesday 24th March 12:32

[marshalla]

dogzilla said:

marshalla said:

Can you give us a link the to judgment please ? I'm struggling to find one - but probably using the wrong search terms.

There are a number of closely related judements but the most interesting one is : Coles v Hetherton

Which would be this one : http://www.bailii.org/ew/cases/EWCA/Civ/2013/1704....

(Supreme Court seem to have refused to look at it again as no new points of law were raised).

[Shezbo]

Unfortunetely this IS not the case - if you chose to repair it for a lower amount, you cannot pocket the difference.

You cannot be seen to "make money" from a claim: as you have got your car repaired before anything is put in writing or the repair has been authorised, that is the repair route YOU have chosen and therefore the amount they will now settle?

[dogzilla]

marshalla said:

Which would be this one : http://www.bailii.org/ew/cases/EWCA/Civ/2013/1704....

(Supreme Court seem to have refused to look at it again as no new points of law were raised).

Yes the supreme court dismissed the appeal and the judgement just rehashes what has been said before and reinforces the original verdict. So I strongly believe I am on firm footing here.

Shezbo said:

Unfortunetely this IS not the case - if you chose to repair it for a lower amount, you cannot pocket the difference.

You cannot be seen to "make money" from a claim: as you have got your car repaired before anything is put in writing or the repair has been authorised, that is the repair route YOU have chosen and therefore the amount they will now settle?

Again, please with the greatest of respect, you are wrong and I have posted legal cases with which I am basing my claim.

Firstly, the BMW quote was signed off and authorised, £8k worth of repair. That is the definition of "reasonable repair cost" to return the goods back to the condition prior to the accident. The law does not care what you spend to repair it, the court is simply concerned with a NOTIONAL cost, that is, an IMAGINARY cost to reasonably repair it. The law does not and has not taken into account the actual cost of repair.

I AM NOT MAKING MONEY. Sorry for the caps but I am really frustrated at this point that people seem to think I am profiteering. I AM NOT.

As I said, lets imagine you are a body work repair guy and because of your skill and contacts you can repair the car for £0.

Do you honestly believe that it then follows that the 3rd party is not liable to pay you anything because you repaired it for free? What if I decided simply not to repair the car. Does that mean the 3rd party gets a free ride for smashing up my car?

Please, if I have to repeat myself on this point I am seriously going to blow a gasket.

Also you must realise this is in relation to 3rd party liability. Where a 3rd party has damaged your car through no fault of your own.

If you are at fault then it's a different question and the insurance companies are within their right to only reinburse you your actual costs.

[RyanTank]

OP, I get where you are coming from, BUT I don't see it ending in your favour.

You made the decision to have the car repaired under the assumption the Insurance co would pay out for the repair at BMW or send you the cheque for the agreed repair amount. as you'll realise now, you should have just waited for the BMW repairs to happen or to have the cheque clear in the bank and your still knackered car on the drive.

However, you did do the honest thing and inform them of the blown turbo, something that is irrelevant to the 2 outstanding claims for body repair. And I see your thinking of " they will be paying me out so I'll get the turbo done now and pay for it all out of the claim, ohh and while its in the garage I may as well get them to do the bodywork too, after all the insurance is picking up the bill in the end".
I do however struggle to see how you thought getting an indy quote for repairs and then going ahead with them would still entitle you to the original quote amount, even though the original quote if for a BMW repair to make the car 'as new' and not just repaired with filler and paint.
Your argument of the car now being valued at less than market value due to the repair is entirely down to the condition of the work carried out. there would be no record of the car having been damaged/repaired other than on your future insurance policies and the garage that did the work. So realistically speaking, should you chose not to declare the work to the new buyer then they wont know its been repaired. The loss you will incur from this now is entirely down to having the cheaper repair done.

The insurance company have authorised and paid(I think) for the lower estimate for repairs as they realistically cant say to you down the phone "don't be stupid, get it done at BMW so we can claim the maximum amount from the 3rd party and only pass on a fraction of it to you" or "You do realise that your doing yourself and us out of a few grand now by going this route, maybe think on what we said for a day or two before you see our point of view".

I'd genuinely be very surprised if you see any more than the cost of repairs and the small compensation offered for everything, unfortunately leaving you out of pocket for the turbo work.

I'm not intending on causing upset to you OP, I'm just saying it as I see, as a few others have.

Think of it like this -

My Aunt hit her neighbours car while pulling away, owned up to it and to avoid it going through the insurance they agreed to settle it with her paying for the quoted work. Her local garage estimated the repair at £200 for a filler and spray job, so she gave her neighbour £200 for him to get it done. 6 months later his car still has a buggered bumper and she's effectively given him £200 to do with what he wants. He clearly hasn't put it towards the repair cost so should she be asking for the money back? No. Is she entitled to get the money back. No. Because she agreed to pay him, and not to pay the garage for the work.